Small problems can easily turn in to financial emergencies for millions of people who don’t have any savings and can’t access any credit.

One-off expenses like car repairs or back-to-school costs are forcing many people to seek quick fixes – like selling their valuables or getting a high-cost loan from fringe lenders, with fees that trap them in a cycle of debt.

Renee Viellaris’ article ‘Struggling families targeted by ruthless payday lenders’ highlighted the predatory nature of some high-cost lenders, who are leaving many Australians in a worse position.

We welcome focus on this issue and support the Government’s proposed reform in this area. In the meantime, we are taking action ourselves.

Today we announce the launch of Speckle, a new service for people who find themselves seeking small loans under $2,000, and at around half the cost of similar loans in the market. It creates a genuine alternative to the high-cost lenders.

The ability to borrow money, on fair terms, can help people to improve their lives and move forward.

Every day, banks help people with loans – big and small – to buy essential items, to invest in family homes, or to start and grow their businesses.

But 17 per cent of people in our community are living outside the financial system, with no access to basic banking products.

And 2.6 million Australians have no savings at all. That’s one in seven people.

Since 2003, NAB and Good Shepherd Microfinance, a national not-for profit organisation, have been working to support people to improve their financial wellbeing and to disrupt the cycle of disadvantage.

We’ve helped more than 500,000 people on low incomes with no or low interest loans for essential items through seven Good Money stores and a network of 160 community organisations in almost 700 locations around Australia.

To date, our partnership has focused on offering programs for people on low incomes, but there’s a growing gap in the market that needs assistance.

With an increasingly casual workforce, the rising cost of living and low wage growth, more Australians are unable to access mainstream finance and are turning to fringe lenders to meet their needs. In the past three years, one in five households took out a short term cash loan.

Today, we have extended our partnership to reach this underserviced and growing section of our community through Speckle.

Speckle uses leading edge technology to offer loans online with a quick approval process to fill the gap that currently exists.

It’s a fairer option for people needing a small amount of cash quickly to cover necessary things like car repairs, children’s needs and other household expenses.

Where needed, Speckle also provides customers with access to financial counselling and other social services, to ensure they’re getting the right support they need to move forward. In some cases a Speckle loan might not be the best option and if so, we will try to help find the right solution for their situation.

Because Speckle is offered by a not-for-profit organisation, all fees go back into keeping costs as low as possible for customers.

Financial exclusion remains a major issue in our country and together we are determined to create sustainable change to build a financially inclusive and more resilient Australia.

Together, Good Shepherd Microfinance and NAB are setting a goal of improving access to fair and affordable finance for 100,000 people each year. We aim to reach that goal within two years.

Last year was our biggest on record and with the support of the local microfinance network, more than 27,300 no and low interest loans were provided to people on low incomes.

We are making progress, but we have so much more to do to reach our goal. And the entire banking sector has a role to play in ensuring that no one gets left behind.

Together, we are backing borrowers to move ahead – a vote of confidence in their future.

By Andrew Thorburn, CEO of NAB and Adam Mooney, CEO Good Shepherd Microfinance

Find out more about how NAB is backing communities.